Ciber To Lay Off 4 Percent Of Workforce As Sales, Earnings Fall Again

Sales and earnings tumbled again for Ciber as the solution provider said it plans to lay off 280 employees as part of a $27 million restructuring plan.

The Englewood Village, Colo.-based company saw year-over-year revenue for its third quarter ended Sept. 30 drop 3 percent on a constant currency basis to $211.3 million, falling short of analysts' estimates of $212.1 million.

Quarterly earnings excluding restructuring charges sunk from a profit of $1.4 million, or 2 cents per share, last year to a loss of $1.9 million, or negative 2 cents per share, this year. Analysts were predicting positive earnings of 2 cents per share.

[Related: Ciber Plans $24M Restructuring Following Q2 Earnings Drop]

"We recognize that, as with any journey, the progress may not be linear," Ciber President and CEO Michael Boustridge said during the company's earnings call. "It will take time, and we have more work to do."

Investors sent Ciber's stock down 3.5 percent in trading Tuesday to $3.02 on the quarterly results, which were released before the market opened.

Ciber upped the costs associated with its restructuring plan from $24 million to $27 million, $21 million of which was incurred this quarter, CFO Christian Mezger said during the earnings call. The plan was unveiled in late July, 45 days after Boustridge took the reins as CEO.

Expenses include $20 million related to employee severance and benefits and $7 million related to office closures and other expenses, according to the company.

Mezger told CRN that Ciber plans to lay off 280 people, or more than 4 percent of its 6,500-person global workforce. Ciber, though, will hire a significant number of workers in its near and offshore locations, Mezger said.

To date, Metzger said Ciber has increased its headcount in offshore operations by 100 people, 50 of whom are subcontractors. He expects offshore operations to deliver more of the company's growth going forward.

The restructuring should result in an annualized pre-tax savings of $18 million, which Metzger will said will begin being realized in the second half of 2015.

However, regulatory hurdles in Europe mean that Ciber doesn't expect to fully execute its strategy and achieve corporate goals until mid-2016, Boustridge said.

Another piece of the plan will consist of realigning sales and operations into global teams, Boustridge said, such as a consolidated global client care organization responsible for creating a single point of accountability for all client care inquiries.

Ciber's North American division posted revenue of $106.3 million, up 1 percent from a year ago, while revenue abroad fell by 7 percent on a constant currency basis -- which factors in foreign currency exchange rates -- to $105 million.

"Improvement in North America in encouraging," Mezger said. "There is still work to be done in international operations."

But Ciber has enjoyed recent success taking its areas of market leadership in North America and translating that into wins in Europe and vice versa.

For instance, Boustridge said Ciber's higher-education vertical -- traditionally an area of strength in North America -- has been awarded a series of opportunities in Europe, while the strength of Ciber's European utilities verticals won the company a key contract in North America.

PUBLISHED OCT. 28, 2014